An ex-JP Morgan broker who claimed his former firm misrepresented the opportunities to grow his book of business found no sympathy when he aired his grievances before a panel of FINRA arbitrators.
Joseph Ellison was ordered to pay back all the money he owed on a $750,000 upfront loan that he received from JP Morgan when he joined the firm in 2009 from Morgan Stanley, according to an award posted on FINRAs arbitration database this month. Ellison was held liable for almost $590,000, plus interest in the amount of $42.37 per day, until the loan is paid in full. In addition, he was slammed with JP Morgans legal fees totaling $200,000 and bore the brunt of the FINRAs arbitration fees, paying $19,650 of the total $24,450.
Ellison resigned from JP Morgan in April 2012, two-and-half years after joining the firm. He had signed a promissory note in which he agreed to repay JP Morgans loan over the course of seven years, said JP Morgans attorney, Eugene Small of Eugene L. Small, P.C., in New York.
Ellison claimed that while he was promised that hed work at JP Morgan, what he wound up getting was old Bear Stearns, which JP Morgan acquired in 2008 following the firms collapse. Rather than JP Morgan technology, he ended up with the Bear Stearns platform and Bear Stearns back-office capabilities and bond-trading support, said Ellisons lawyer James Sigler, an attorney in Granada Hills, Calif.
Mr. Ellison wasnt interested in going to Bear Stearns, yet thats what he got, Sigler said.
As a result, Ellison lost clients who got fed up with the antiquated systems, according to Sigler. A number of his large clients gave up trying to use the outdated IT systems and left. Others left because Mr. Ellison couldnt offer them a full range of financial products, Sigler said.
A big point of contention was Ellisons belief that he would be able to sell insurance. Ellison claimed that he thought this was the case, but JP Morgan argued otherwise, saying that it told Ellison several times that the firm was not in the insurance business, said Small.
Small noted that Ellison made a litany of claims, all of which were disproven at the hearing. Ellison claimed, for example, that JP Morgan has only 10 outside money managers he could use, when in fact he had well over 100, according to Small.
It was all sorts of baseless claims that he set forth in the hope of getting out of having to pay them back all the money he owed them [JP Morgan] and maybe getting some more money, Small said.
In addition to the $750,000 loan, Ellison was also offered $250,000 in deferred stock, which he never received, said Sigler.
A call and email to Ellison were not returned. Darin Oduyoye, a spokesperson for JP Morgan Securities, declined to comment.
